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Multiple breaches, the notice of charge and settling at a discount
The module’s worked examples, then cases to attempt before revealing their solution · 4 sections · 454 words · 6 min
Worked example
Marta's two notices
Understatement penalties: 7,000 € in year one, 4,200 € in year two. Same tax, two years. Minimum base: 7,000 € raised by half = 10,500 €; minimum increase of one quarter: 10,500 × 1.25 = 13,125 €. The two penalties add up to 11,200 €, and paragraph 7 forbids going above that. The single penalty cannot exceed 11,200 €.
Practical case
Settle or fight
A limited company receives an assessment notice with an understatement penalty of 9,000 €. The director believes the claim is justified and wants the cheapest exit, with no appeal. How much penalty must the company pay if it settles in time, and what does it lose by letting the deadline pass?
Hint: Article 17 of Decree 472 uses the same fraction as article 16.
Show the solution
The penalty was imposed with the assessment notice, so article 17 applies: settlement costs one third of the penalty imposed, within the appeal deadline. 9,000 / 3 = 3,000 €, provided this is not below one third of the statutory minimums, which holds here because the penalty imposed is already the 70 % amount. If the deadline passes, the notice becomes final and the penalty stays at 9,000 €.
Answer: 3,000 € in penalties; after the deadline the full 9,000 € is due.
Practical case
Two taxes in the same year
An audit of a single year finds, for the same invoicing error, a VAT penalty of 5,000 € and a corporate income tax penalty of 3,000 €. The office applies the single-penalty mechanism at its minimum. What is the single penalty, and does it respect the ceiling?
Hint: Several taxes, same year: first the one-fifth step-up, then the minimum quarter increase.
Show the solution
The most serious penalty is 5,000 €. Because several taxes are involved, it is raised by one fifth: 5,000 × 1.2 = 6,000 €. The minimum quarter increase follows: 6,000 × 1.25 = 7,500 €. The two penalties add up to 8,000 €, more than 7,500 €, so the paragraph 7 ceiling is respected and the minimum single penalty is 7,500 €.
Answer: 7,500 €, below the 8,000 € ceiling.
Practical case
A settlement paid in instalments
A company receives a notice of charge with penalties of 180,000 € and decides to settle within the appeal deadline. How much must it pay, in at most how many quarterly instalments, and how large is each instalment before interest?
Show the solution
Settlement costs one third of the penalty stated: 180,000 / 3 = 60,000 €. The amount due exceeds 50,000 €, so article 16 allows up to sixteen equal quarterly instalments: 60,000 / 16 = 3,750 € each. The first is paid within the appeal deadline; interest is added to the later ones.
Answer: 60,000 € in up to 16 instalments of 3,750 €, plus interest.
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